Clear Channel And Providence Settle TV Deal Dispute
February 25, 2008 at 10:12 AM (PT)
CLEAR CHANNEL COMMUNICATIONS has settled its dispute with PROVIDENCE EQUITY PARTNERS over the sale of a group of local television stations, sources told THE WALL STREET JOURNAL. The two sides agreed over the weekend to a revised deal under which PROVIDENCE would get the stations for $1.1 billion.
However, WACHOVIA, one of the banks financing the deal, has threatened to walk away from the transaction and said it would not participate in a meeting TODAY (2/25) to close the deal. The bank has argued that even though the sale price is lower and the new agreement contains a larger equity component, it is a separate transaction from the one it originally agreed to fund. See DOUGLAS McINTYRE's blog.
WACHOVIA agreed to finance $500 million for the transaction, the largest chunk. It has also agreed to provide an additional $500 million for the $20 billion buyout of CLEAR CHANNEL itself.
THE NEW YORK TIMES reports WACHOVIA on FRIDAY (2/22) even sued PROVIDENCE in a NORTH CAROLINA state court, contending that the new agreement has voided its previous commitment. If WACHOVIA causes the deal to collapse, it would be held responsible for a $45 million breakup fee.
GOLDMAN SACHS and UBS have also committed to finance the new transaction, which now calls for PROVIDENCE to borrow less money at a higher interest rate.